Law Offices of
Seller’s Disclosures in the Sale of Residential Real Estate in California.
First rule of thumb: Disclose, disclose, disclose.
There are 2 main disclosure documents used in most residential purchase agreements and sale agreements, published by the California Association of Realtors. The “Transfer Disclosure Statement” and the “Seller Property Questionnaire.”
Many sellers mistakenly assume that selecting all “no’s” on these forms is a good thing and that if you simply answer all the questions you are in the clear.
That is wrong.
How to fill out the seller’s disclosures forms:
“Yes” answers with an explanation protect you as the seller. Any issue that arises relating to a question that you answered “no” to is likely to cause you problems. You are better off over-disclosing because when buyers come after a seller for a problem, it is because it was not disclosed.
How to use the forms to disclose:
After each group of questions, there are tiny lines for your explanation. The lines are always inadequate so, write in “See Addendum A” on those lines, and include your explanation/s on a separate piece of paper, called “Addendum A.”
You are responsible for telling the buyer what you know, but you are not required to do an investigation to discover things you don’t know about.
In a claim for nondisclosure, the buyer has to prove that you actually knew about the problem. It is not enough that you should have known.
However, a judge or jury might conclude that you did know. Evidence of you actually knowing can come from neighbors with whom you discussed the problem; or from service people that you had working on the house; or even from the disclosures that you received when you bought the house.
Carefully consider the traps in your answers and statements:
There are traps for the unwary in the Transfer Disclosure Statement and Seller Property Questionnaire. There questions that touch on the same sort of things. These topics overlap: mold or moisture; alterations; settling; flooding, grading and drainage; nuisance; CCRS; walls, fences and driveways. Make sure your answers match on questions that overlap!
A lot of questions deserve a “yes” answer like fire abatement; alterations, modifications and repairs; ongoing maintenance. What house doesn’t have maintenance? Check the preliminary title report to see any issues on schedule B—chances are there are a few that you are expected to know about.
Don’t forget to give the buyer all the reports, inspections, seller’s disclosures, warranties, maintenance recommendations, estimates, studies, and surveys or other documents about the property.
Finally, don’t limit yourself to what’s on the forms. If you know of something else, put it on your Addendum A.
Disclosures and “yes’s” are a good thing!
And, if you want to be sure, give us a call.